Texas – September 20, 2010

What We Did

We reviewed the use of Recovery Act funds in Texas for public housing projects and for energy efficiency and conservation block grant projects. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-1000SP. For these programs, we focused on how funds were being used, how safeguards were being implemented to ensure funds are used appropriately, and how results were being assessed:

The public housing program was selected to provide a continuing or updated assessment of Public Housing Capital Fund competitive and formula grants awarded under the Recovery Act—an assessment covering the status of obligations and expenditures by public housing agencies, oversight assistance and monitoring provided by the U.S. Department of Housing and Urban Development (HUD), and the overall impacts of the funds. We contacted two HUD offices in Texas—the Fort Worth Regional Office and the San Antonio Field Office—to determine the types and extent of assistance they provided to help public housing agencies meet Recovery Act deadlines and review the offices' plans for monitoring public housing agencies' compliance with requirements for using grant funds. We obtained updated information on three ongoing projects that we began covering in our previous work and reports—one project funded by a competitive grant awarded under the Recovery Act and two projects funded by formula grants awarded under the act. The three projects are managed by the San Antonio Housing Authority (SAHA), which received relatively large amounts of both Capital Fund competitive grant funds and formula grant funds directly from HUD[2]. At SAHA, we reviewed project-related documentation, including funding obligation and expenditure data, and made on-site observations of progress on the three projects[3]. Also, we interviewed SAHA's Executive Director, the Chief Financial Officer, the Director of Procurement, and other responsible officials. Further, in contacting HUD and SAHA officials, we obtained perspectives on the various impacts of Recovery Act funds.

We selected the Energy Efficiency and Conservation Block Grant (EECBG) program, which is administered by the U.S. Department of Energy (DOE), because we had not previously reviewed it and because over $200 million was awarded to entities within Texas[4]. The purposes of the EECBG program include assisting eligible communities to implement strategies to reduce fossil fuel emissions and improve energy efficiency. In Texas, we selected four recipients of EECBG funding to review—the State Energy Conservation Office (SECO) and three cities (Austin, Bryan, and Round Rock) that received direct awards from DOE[5]. In visiting each of the four recipients, we reviewed available documentation and interviewed officials to determine the process for selecting projects, the amounts of funds obligated and spent, oversight methods for monitoring use of funds, and plans for measuring energy savings resulting from EECBG projects.

Further, in Texas, we obtained state and local government perspectives on overall use and impact of Recovery Act funds. Specifically, at the state level, we obtained perspectives from the Office of the Governor, staff of the Legislative Budget Board[6], and the State Comptroller's Office; at the local level, we contacted city management officials in Austin and Round Rock[7]. Also, we reviewed efforts by state and local government to promote accountability for use of Recovery Act funds. We focused in particular on efforts by the Office of the Governor; the State Auditor's Office; and city auditor offices or other responsible officials in Austin, Bryan, Dallas, Houston, and Round Rock[8].

Public housing

All of the 10 public housing agencies in Texas that received Public Housing Capital Fund competitive grants ($21.5 million total) are on track to meet the September 2010 deadline for obligating all funds, according to HUD officials[9]. To help ensure that this occurs, the two HUD field offices we contacted in Texas noted plans for providing continued assistance to public housing agencies. Officials at the HUD San Antonio Field Office stated, for instance, that they sponsor weekly telephone conferences—with invited participation from all of the 88 public housing agencies in the office's jurisdiction—to collaborate and discuss new developments. Also, to help ensure compliance with requirements for using Recovery Act funds, the HUD field offices we contacted in Texas are implementing the monitoring strategy promulgated by HUD headquarters—a strategy that includes various types of reviews of public housing agencies. Regarding overall impacts or benefits of these funds, HUD field office officials cited improvements in public housing agencies' Public Housing Capital Fund grant management and enhanced partnering relationships with the housing agencies. SAHA officials stated that Recovery Act grants are enabling capital improvements benefiting residents of a significant portion (42 percent) of the agency's total public housing inventory of 6,273 units. Also, for the most recent quarter (April to June 2010), SAHA reported that about 61 jobs (full-time equivalents) were funded with Recovery Act dollars[10].

Energy efficiency and conservation block grants

For the EECBG program, Texas received approximately $208.9 million, which consists of $163.3 million awarded by DOE directly to cities, counties, and tribal communities in the state and $45.6 million awarded to SECO. The four recipients we reviewed in Texas (three cities and SECO) have taken steps to choose projects. As of late summer 2010, three of the recipients each reported that more than 80 percent of their respective funding was obligated for EECBG project expenses, but none of the four recipients reported having spent more than 6 percent of their funds. The four EECBG recipients are implementing processes to monitor the use of Recovery Act funds through methods such as conducting on-site inspections and verifying that materials meet specifications. Also, in accordance with DOE guidance, the four recipients reported that they have plans to measure energy savings resulting from EECBG projects. Further, for the most recent quarter (April to June 2010), the four recipients collectively reported that about eight jobs (full-time equivalents) were funded with Recovery Act dollars.

Use and impact of funds

Recovery Act funds continue to support a range of programs in Texas. As of August 1, 2010, Texas state entities had spent a majority—approximately $12.2 billion or about 62 percent—of the awarded $19.8 billion Recovery Act funds, according to the State Comptroller's Office. The Governor's staff noted Texas has achieved a balanced budget and Recovery Act funds were not used to estimate the revenue available to support the budget. Staff from key legislative offices noted that the Recovery Act increased federal funds available to support state programs. In preparing for the end of Recovery Act funding, state officials continue to emphasize the Governor's and the state legislature's guidance to avoid using Recovery Act funds for ongoing expenses. At the local government level, city officials we contacted in Austin and Round Rock commented that Recovery Act funds have had a limited overall budgetary impact but have been helpful in furthering specific efforts.

Promoting accountability

Texas state entities, particularly the State Auditor's Office, the Governor's Office, and the State Comptroller's Office, continue efforts to help ensure that Recovery Act funds are used appropriately. These efforts include conducting audits and tightening controls to help ensure only eligible recipients receive Recovery Act payments. Also, local government audit offices or other responsible officials in the five cities we contacted—Austin, Bryan, Dallas, Houston, and Round Rock—have similar efforts underway or planned. Further, in July 2010, after completing a Recovery Act-related performance audit of the Workforce Investment Act of 1998, the State Auditor's Office reported that the two local workforce development boards it reviewed did not calculate the number of jobs funded with Recovery Act dollars consistent with guidance provided by the Texas Workforce Commission. Going forward, the report noted that the Texas Workforce Commission and the two local boards generally concurred with recommendations for improving accuracy in calculating and reporting the number of applicable jobs.

[2] Of the hundreds of public housing agencies in Texas, SAHA received the second highest amount ($5.3 million) of Public Housing Capital Fund competitive grants awarded under the Recovery Act, and SAHA received the highest amount ($14.6 million) of Public Housing Capital Fund formula grants awarded under the act.

[3] The SAHA project funded by the competitive grant involves improvements to the Villa Hermosa Apartments, which has 66 units for the elderly and/or disabled community. The two SAHA projects funded by formula grants involve improvements to, respectively (1) the Lewis Chatham Apartments, which has 119 units for the elderly and/or disabled community and (2) the Highview Apartments, which has 68 units for families.

[4] The EECBG program was authorized by Title V, Subtitle E, of the Energy Independence and Security Act, which was signed into law on December 19, 2007. However, the program was not funded until passage of the Recovery Act in 2009.

[5] We selected Austin, Bryan, and Round Rock for various reasons. Austin is Texas's capital and the headquarters location for state agencies. As such, in conducting Recovery Act work, our review team routinely visited Austin. Also, Austin received $7.5 million in EECBG funding. Bryan and Round Rock—which received $695,000 and $955,000 in EECBG funding, respectively—are geographically located near or relatively close to Austin. Moreover, these three cities include a large metropolitan area (Austin) and a less populous city (Bryan), both which had not outlaid any EECBG funding at the time of our selections (as of May 14, 2010), and a medium sized suburb (Round Rock) that had outlaid a portion of its EECBG funding.

[6] According to state officials, the Legislative Budget Board is a permanent joint committee of the Texas legislature that develops budget and policy recommendations for legislative appropriations for all agencies of state government, as well as completes fiscal analyses for proposed legislation. The Lieutenant Governor and the Speaker of the House of Representatives serve as co-chairs of the board. Other members include the chairs of the House Appropriations Committee and Senate Finance Committee. See www.lbb.state.tx.us.

[7] We selected Austin and Round Rock because our staff was also reviewing the use of EECBG funds by these cities.

[8] Accountability efforts by audit offices in three of these cities (Austin, Dallas, and Houston) are discussed in our May 2010 report (GAO-10-605SP), and we again contacted officials in these cities to obtain updated information. As noted in our May 2010 report, these cities were awarded large amounts of Recovery Act funding and are located in different geographic areas of Texas, while collectively accounting for approximately 17 percent of the state's total population. We selected the other two cities (Bryan and Round Rock) because our staff was also reviewing the use of EECBG funds by these cities. See GAO, Recovery Act: States' and Localities' Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability (Appendixes), GAO-10-605SP (Washington, D.C.: May 26, 2010).

[9] As noted in our May 2010 report (GAO-10-605SP), the 351 public housing agencies in Texas that received Public Housing Capital Fund formula grants ($119.8 million total) under the Recovery Act met the March 2010 deadline for obligating all the funds

[10] Job calculations are based on the number of hours worked in a quarter and funded under the Recovery Act and are expressed in full-time equivalents, calculated as the total hours worked divided by the number of hours in a full-time schedule. Recipient reports cover only direct jobs paid from Recovery Act funding and do not include the employment impact on material suppliers (indirect jobs) or on the local community (induced jobs).